WELCOME TO JOBS DAY: POSITIVE SURPRISE? — Moody’s Analytics’s Mark Zandi emails: “Everything points to a solid jobs report for February. I expect a 190,000 gain and 7.8 percent unemployment rate. There should also be upward revisions to job growth in the previous two months. It’s early to see the impact of the tax increases and spending cuts on jobs. I would expect weaker job growth this spring and summer when the fiscal headwinds are blowing hardest. …

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“Unemployment may even notch a bit higher during this period, and the economy will be vulnerable if anything goes off script. Hours worked would be a good indicator to watch in the report as a leading indicator of future job growth. Businesses will reduce hours before they scale back hiring. Sequester furloughs will also show up as fewer hours.”

Pantheon Macroeconomics’s Ian Shepherdson: “We think the odds favor a slightly bigger increase than was reported in Wednesday’s ADP survey. The BLS measure of private payrolls has been stronger than the ADP number in February for four straight years, and the seasonals in the official data should be quite friendly too. Accordingly, we look for a headline increase of about 220,000, with private payrolls up 230,000. As always, though, remember that noise can wreck the best models, and the margin of error in the official estimate of the change in headline payrolls is a hefty +/-100,000. It has been a while since the headline delivered a huge surprise, but the risk is ever-present.”

Nomura: “On average, 181,000 jobs were added each month in 2012 compared with 175,000 jobs each month in 2011, a clear indication that the labor market has been moving sideways. We believe that the sideways trend persisted in February and are forecasting an increase in total nonfarm payrolls of 165,000 (consensus: 163,000). … Construction jobs likely continued healthy gains as the housing recovery deepens, while manufacturing jobs are expected to have increased by 5,000 (consensus: 9,000). We expect a tick down in the unemployment rate to 7.8 percent.”

TBTF REACT — Lots of readers did not take kindly to yesterday’s “Wall Street Mind-Meld” reaction to Attorney General Eric Holder’s comment that it was harder to go after so called “too-big-to-fail banks” because doing so could damage economy. … Cam Fine of the ICBA emails: “[W]hen I heard Holder admit that TBTF distorts our justice system, I wondered how Wall Street would push back. I knew they would push back swiftly and hard. It took them about 10 nanoseconds to respond. And now we know the general tack they will take. …

“Rather than try and defend an indefensible position (never a good idea), they will use the ‘Oz’ ruse — pay no attention to the men behind the curtain. The Great and Powerful Dodd-Frank is the real villain here — NOT the too-big-to-fail/too-big-to-jail megabanks hiding behind the curtain that wrecked the U.S. economy to the tune of $13 trillion dollars and devastated the lives of millions, because as we all know, ‘too big to fail’ is a myth.”

Jeff Connaughton, author of “The Payoff: Why Wall Street Always Wins” emails: “Yesterday, Attorney General Holder finally told the truth, which [former Sen.] Ted Kaufman and I suspected all along. We've had a collapse of the rule of law for TBTF banks, and the Justice Department leadership publicly doesn't believe Dodd-Frank ended TBTF. The Fed's vague promises that it's making progress on living wills and orderly liquidation authority — even while the market continues to subsidize TBTF banks because it believes the government won't let them fail — are making it apparent to most objective people that the Dodd-Frank mechanisms are inadequate.” Get the book: http://amzn.to/XtBGXi

THIS MORNING ON POLITICO PRO FINANCE – MJ Lee on the White House’s outreach to corporate America. … Patrick Reis on Elizabeth Warren’s latest bout with regulators. … To learn more about Pro's subscriber-only coverage -- and to get Morning Money every day before 6 a.m. -- please contact Pro Services at (703) 341-4600 or info@politicopro.com.

GOOD FRIDAY MORNING — M.M. is on a media panel this morning at the Standard hotel, hosted by The Clearing House. Stop by if you are around. It’s on the High Line! As always, send your tips and comments: bwhite@politico.com; and follow on Twitter: @ morningmoneyben and @ POLITICOPro.

DRIVING THE DAY — Employment report at 8:30 a.m. EST expected to show a gain of 165,000 jobs and no change to the 7.9 percent jobless rate. Hourly earnings expected to grow 0.2 percent.

SNOW-A-CULPA — We teased D.C. for freaking out then getting no snow. But some outside of D.C. got walloped. Gary R. Fink emails: “TRAPPED. 18 inches on the ground. Snow plow has packed in over two feet at our drive exit. Not sure we can ram through, even with our 4/4 pickup. We live in a cabin three miles from Skyline Dr., down the western slope of Blue Ridge. Hope … D.C.-ites have a productive day.” Sorry Gary!

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LEVIN LEAVIN’ — Sen. Carl Levin (D-Mich.) said he would not run for reelection next year, giving Dems another tough seat to defend. Levin was a zealous investigator of Wall Street banks and tax avoiders as chairman of the Senate Permanent Subcommittee on Investigations. From Levin’s announcement: “Years of bipartisan work by the Permanent Subcommittee on Investigations that I chair have shed light on tax avoidance schemes that are a major drain on our treasury. The huge loss of corporate tax receipts caused by the shift of U.S. corporate tax revenue to offshore tax havens is but one example of the egregious tax loopholes that we must end. Thirty of our most profitable companies paid no taxes over a recent three-year period, although they had over $150 billion in profits. Tax avoidance schemes that have no economic justification or purpose other than to avoid paying taxes may be legal, but they should not be.”

COMING NEXT WEEK: WHALE HEARING — Per release: “The Permanent Subcommittee on Investigations has scheduled a hearing, ‘JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,’ on Friday, March 15, 2013, at 9:30 a.m. in room G-50 of the Dirksen Senate Office Building. A press briefing in advance of the hearing will be held the previous day, on Thursday, March 14, 2013, at 9:45 a.m.”

TREASURY DEPARTURE LOUNGE: MATT ANDERSON — Per a little birdie: “Matt Anderson — highly regarded Treasury flack, TARP mathematician, skilled communicator and half of ‘The Andersons’ duo — is moving on after three years in Washington. Matt has handled some of Treasury’s toughest assignments, patiently navigating reporters through some of the most complex issues related to the financial crisis response, the debt limit and housing finance reform. … [H]is colleagues are proud he’s keeping at the noble cause of public service by joining up with Ben Lawsky’s Department of Financial Services in his home state of New York. He even bought some shirts that fit and new ties to signal his enthusiasm for the gig.”

BANKS ACE STRESS TESTS (BUT SO WHAT?) — Guggenheim Partners’s Jaret Seiberg: “The strong performance of the 17 publicly traded banks in the Dodd-Frank stress test was expected. We continue to believe it would be a mistake to read these results as saying the Fed next week will permit these banks to distribute more in dividends and buybacks than the modest increase over 2012 levels that we have been projecting.” Report is here: http://1.usa.gov/ZjqdGd

CBA President and CEO Richard Hunt: “The results of the Federal Reserve stress test reaffirm our position that retail banks are in a significantly better position today than in the past two decades. The capital increases over the past few years are not temporary, but permanent changes in our industry.”

ABA President and CEO Frank Keating: “We're pleased that an overwhelming majority of institutions once again passed these tests with flying colors. These results, achieved in the face of extreme assumptions and highly pessimistic scenarios, are further proof that the banking industry has rapidly regained its health and is strong enough to withstand even the most challenging economic circumstances. Capital levels are 25 percent higher than they were just five years ago, and total industry capital now stands at $1.6 trillion.”

SPECIAL ATTENTION FOR TRADERS — WSJ’s Michael R. Crittenden, Dan Fitzpatrick and Liz Rappaport: “The Federal Reserve served notice that the financial industry's health continues to improve, potentially clearing the way for large U.S. banks to funnel tens of billions of dollars to investors in increased dividend payments and share buybacks. … But the ‘stress test’ figures released Thursday also showed that the Fed is paying special attention to the capital strength of companies with large trading operations, a group that includes Goldman Sachs, Morgan Stanley and JPMorgan Chase. That scrutiny could make it harder for those firms to win regulatory approval to increase dividends and buybacks and could bruise the companies' recovering reputations. …

“Shares of Goldman and JPMorgan have been trading at their highest levels in a year, but both companies dropped more than 1 percent in after-hours trading following the Fed release. … Some of the biggest companies on Wall Street were clustered near the bottom of the ranking the Fed published of minimum capital ratios over the nine-quarter period. The Tier 1 common ratio, measuring high-quality capital as a share of risk-weighted assets, was 5.7 percent at Morgan Stanley, 5.8 percent at Goldman Sachs, 6.3 percent at JPMorgan. …

“Only Ally Financial Inc., an auto lender that is trying to shed its mortgage unit through bankruptcy proceedings, posted capital levels during the two-plus-year downturn scenario that failed to meet the Fed's minimum standards.” http://on.wsj.com/13IQapM

GOLDMAN RANKS LOW — FT’s Tom Braithwaite and Tracy Alloway in New York and Shahien Nasiripour in Washington: “Federal Reserve stress tests identified Goldman Sachs as one of the weaker financial groups on Wall Street but gave Citigroup confidence to announce a planned $1.2 billion share buyback. … Citi was first to announce its distribution plan, including a $1.2 billion buyback in the next 12 months. ... Goldman, normally renowned for its resilience, would suffer a $20 billion loss in the depths of the hypothetical crisis, and its ratio of core ‘tier one common equity’ capital against risk-weighted assets would fall to 5.8 percent, compared with a minimum requirement of 5 percent, the Fed said.” http://on.ft.com/Xuc8cy

FISCAL FLY-AROUND –

WHY THE GRAND BARGAIN IS STILL UNLIKELY — Eurasia Group’s David Gordon and Sean West: “Having failed to get traction on his campaign-style approach to quickly end sequestration, the president is altering both his tone and tactics. But it’s far from clear that he is willing to go further on entitlements than in the past or that House Republicans are willing provide the revenue increases he would require to put meaningful entitlement reform in play. Indeed, while Obama's charm offensive is the talk of the week, the House and Senate Budget Committee chairs are gearing up to release fiscal visions next week that will underscore just how far apart the two parties are — and how hard it will be to bridge the divide.”

SENATE DEMS MAP PLANS — POLITICO’s David Rogers: “Senate Democrats mapped out plans Thursday to expand on a House-passed stopgap spending bill — adding full-year budgets for four more Cabinet departments as well as major science and space agencies. Justice, Homeland Security, Agriculture, Commerce, NASA and the National Science Foundation should benefit most. And Senate Appropriations Committee Chairwoman Barbara Mikulski said she has begun drafting new legislative language to expand on the ability of other departments to move money between accounts to cope with cuts ordered last week. … Mikulski and House Appropriations Committee Chairman Hal Rogers (R-Ky.) are working toward the goal of having an agreement in place by March 27, when that same CR runs out. After briefing her caucus at a party luncheon, Mikulski said she hopes to file the final package Monday and begin voting on the floor next Wednesday. A formal House-Senate conference could yet be needed to resolve remaining disputes, but she is betting on a strong bipartisan Senate vote that will give her leverage with Rogers in those talks.” http://bit.ly/X0nKpx

WILL CHARM OFFENSIVE AMOUNT TO ANYTHING? — NYT’s Jeremy W. Peters: “Lawmakers in both parties say the president’s efforts may make him a few new friends, but he is not going to change ideologies. Others privately complained that convening such a high-profile [dinner] seemed like an effort to distract from his failure to help forge a solution to avert [sequester]. Asked Thursday morning about the president’s new social schedule, Speaker John Boehner chuckled before saying he hoped the talks would produce real compromise. …

“Those who have studied the relationship between presidents and Congress doubt seriously whether Mr. Obama’s latest outreach will yield much. ‘It’s a rather shallow notion,’ said George Edwards, a political scientist at Texas A&M University and an expert who has written extensively on presidential power. ‘You’re not going to get committed conservatives to change their long-held ideological commitments because you play a round of golf or invite them to the White House.’” http://nyti.ms/W9o4zB

ALSO FOR YOUR RADAR –

FIRST LOOK: CONSUMER INCOME SQUEEZED — From Absolute Strategy Research’s latest consumer survey, out this morning: “ASR has been writing about what we need to see for markets to transition from sentiment-driven to fundamentally driven. We must see the revival of the U.S. consumer and a more balanced U.S. recovery. … The housing section of the survey looks great … if sustained, there is the potential to reduce and even reverse the pace of deleveraging.

But debt is a problem. … We were surprised that debt levels and debt servicing are more of a concern now than they were six months ago. … This points to a squeeze on income not offset by positive wealth effects. … There is some good news on the labor market, but the economic narrative is bleak. … More think the U.S. economy is in a depression than think it is stable.” http://bit.ly/XXFeQ9

U.S. COMPANIES SHOWER CASH ON INVESTORS — WSJ’s Telis Demos, Steven Russolillo and Matt Jarzemsky: “U.S. companies are showering investors with a record windfall in the form of dividends and share buybacks, helping to propel the stock market's rally. Companies in the S&P 500 index are expected to pay at least $300 billion in dividends in 2013. … Analysts say this year's number could go even higher. Apple Inc., for example, stands to pay out about $10 billion this year in a dividend policy initiated last year. … American corporations also announced plans to buy back $117.8 billion of their own shares in February, the highest monthly total in records dating back to 1985.” http://on.wsj.com/Z40T8D

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Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.